- FTSE 100 closes up 54 points at 7,456
- AstraZeneca raises guidance, inks obesity drug deal
- Updates lift Taylor Wimpey, Auto Trader, but Flutter sinks
4:40pm: FTSE 100 jumps despite mixed earnings
The FTSE 100 closed sharply higher, steadily rising as the seesion progressed, boosted by gains in AstraZeneca and as energy stocks pulled away from earlier lows.
At the close, London's blue-chip index was up 53.95 points, 0.7%, at 7,455.67 while the FTSE 250 jumped 191.59 points, 1.1%, at 18,037.85.
Better-than-expected results propelled Auto Trader to the top of the risers, up 8.7%, while an upbeat trading statement and a survey showing house prices may be close to the bottom lifted Taylor Wimpey.
AstraZeneca rose 2.7% after raising guidance and sealing a deal for a weight-loss drug to rival Novo Nordisk (NYSE:NVO) and Eli Lilly, while an upgrade by Barclays gave Unilever, up 2.1%, a boost.
Heading the other way were betting operator, Flutter Entertainment, which fell 10.3% after forecasting low-end profits after a string of customer friendly betting results while B&M European Value Retail fell 3.4% after profits missed forecast.
3:52pm: Government not rushing into new AI laws
The Government favoured global agreement on artificial intelligence rather than new domestic laws because it could not wait a whole year for legislation to pass, Michelle Donelan has stated.
The Science Secretary faced questions about the lack of AI legislation in the King's Speech, a week after the AI safety summit ended with an agreement that both governments and tech companies should have a role in ensuring safety testing of powerful "frontier" AI models is carried out, rather than firms having sole responsibility.
Donelan told the Commons that the Government would "absolutely" be bringing forward a new law on AI regulation in the future, but added ministers would not be rushed into law-making despite the EU and USA already having taken such steps.
3:14pm: CoStar bid for OnTheMarket not in the national interest
OnTheMarket PLC (AIM:OTMP)'s planned £99 million takeover by CoStar Group is "not in the UK's national interest", according to letters sent on Thursday by Brett Stone, an investor who offered to pump more than £50 million in OnTheMarket last year.
In a letter addressing OnTheMarket shareholders, estate agents in the UK, and all OnTheMarket employees, Stone said the deal would likely result in "significantly higher total portal costs for UK estate agents, more than 10,000 of which are small businesses".
He also said CoStar's "opportunistic offer significantly undervalues OnTheMarket and institutional and estate agent shareholders should both vote against CoStar's offer".
"No deal is better than a bad deal, ending estate agent's ownership in the agents' portal is not the right answer to solve OnTheMarket's problems," said Stone.
2:45pm: Subdued start on Wall Street
Stocks made a subdued start, after broadly as expected jobless claims figures, with investors awaiting remarks from Jerome Powell and a raft of Federal Reserve speakers.
Shortly after the opening bell, the Dow Jones Industrial Average was little changed at 34,110.49, the S&P 500 was up 3.50 points, 0.1%, at 4,386.28 and the Nasdaq Composite was up 4.60 points at 13,655.01.
US initial jobless claims were slightly lower than expected in the most recent week, numbers on Thursday showed.
According to the Department of Labor, new claims amounted to 217,000 in the week ended November 4, down from 220,000 a week prior. The previous week's level was revised up by 3,000 from 217,000.
The latest reading was slightly lower than the FXStreet-cited consensus of 218,000.
The four-week moving average was 212,250, up 1,500 from the previous week's revised average. The previous week's average was revised up by 750 to 210,750 from 210,000
Ian Shepherdson at Pantheon Macroeconomics said he expected a bigger increase this week but the weekly numbers are volatile even when the trend is steady
Layoffs remain very low, he pointed out. “For now, though, most of the near-term risk to payroll growth is slowing gross hiring, rather than increased firing,” he suggested.
2:06pm: Ofgen fines gas and electricity suppliers
Six of Britain’s biggest gas and electricity suppliers will pay out £10.8 million to the energy watchdog after failing to meet the first annual target under a government push to install smart meters across the UK.
Ofgem said British Gas, Ovo, Bulb, E.On, Scottish Power and SSE fell short of the target for 2022 by more than a million smart meters – the first of the Government’s four-year plan launched in January 2022.
1.30pm: Here’s a recap of the top risers and fallers on the market today
Shares of AstraZeneca PLC (LSE:AZN) rose 3% following the upward revision to its full-year core earnings per share (EPS) and revenue forecasts.
The Anglo-Swedish pharma giant now anticipates a low double-digit percentage rise in core EPS, refining its earlier projection from a high single-digit increase.
Auto Trader Group PLC (LSE:AUTO) boosted group revenue by 12% in the first half of fiscal 2024, driven by its car leasing platform and retail valuation products, according to the results posted today.
Shares in Flutter Entertainment PLC (LSE:FLTR) tumbled almost 10% to 12,390p, their lowest since February, after warnings that profits for the year are likely to be at the bottom of the expected range due to "very customer friendly sports results" in the UK and US.
Shares in B&M European Value Retail SA (LSE:BME) were among the biggest fallers on the FTSE 100 on Thursday morning, down over 4% to 515p after profits came in slightly below forecasts and current trading was mixed.
Group revenues of £2.55 billion for the half-year to 23 September were up 10.4% on the previous year.
Argentex Group PLC (AIM:AGFX) shares were off more than 16% on Thursday after the company announced the resignation of chief financial officer Jo Stent from the board with immediate effect.
1:03pm: House prices near bottom, thinks Berenberg
Kallum Pickering at Berenberg thinks while house prices may fall further in early 2024, broad activity could bottom before the turn of the year.
“The surge in mortgage rates during the past year has likely ended now that the Bank of England (BoE) has completed its rate hike cycle.”
“Because c90% of the mortgage market is on fixed-rate contracts, which are priced against prospective money market rates, mortgage conditions can ease on the mere expectation that the BoE will cut rates.”
“In our view, that should happen in Q1 – ahead of a series of rate cuts from Q2 2024 onwards,” he added.
“We look for a strengthening economy through 2024 and rising real purchasing power to lift housing demand in H2 2024 and beyond,” Pickering said.
However, mortgage rates that remain at more historically normal levels will restrain the rebound, he felt, adding the recovery may remain soft for a couple of years until momentum improves once the market fully completes the transition to a higher interest rate environment.
12:28pm: B&M slips despite raising guidance
Shares in B&M European Value Retail SA (LSE:BME) eased 4.2% despite the discount retailer raising guidance.
AJ Bell’s Russ Mould suggested perhaps there was some disappointment at relatively sluggish like-for-like growth in the first six weeks of its ‘golden quarter’, even if the picture in the last three weeks has been more encouraging.
“An admission that volatile market conditions make forecasting tough may also have been in the minds of investors,” he added.
Analysts at Bank of America pointed out first half adjusted Ebitda of £269 million was a touch below the consensus of £274 million.
It described current trading as “reassuring.”
The bank kept a buy rating and on B&M which offers strong earnings growth, superior cash conversion and dividend upside.
It reckons a special dividend announcement in January could be the next catalyst.
12:03pm: Modest gains expected on Wall Street
US stocks are expected to open modest gains at the open although the euphoria of last has calmed, at least for now.
In pre-market trading, futures for the Dow Jones Industrial Average were up 0.2%, while those for the S&P 500 were 0.1% higher, and contracts for the Nasdaq 100 futures were little changed.
Joshua Mahoney at Scope Markets said “the S&P 500 will be hoping to post a ninth consecutive day of gains today, although the momentum of last week has certainly given way to a more hesitant period, driven primarily by big tech.”
“There is a hope that today’s comments from ECB Governor Lagarde and Fed Chair Jerome Powell could unlock the next big move for markets, with the recent recovery coming thanks to a widespread shift away from tightening and towards the timing of the 2024 easing process.”
“However, traders should be careful not to get too carried away, with any monetary easing likely to be prolonged and gradual in nature,” he added.
US Federal Reserve chair Jay Powell will speak at the IMF’s annual research conference in Washington while the presidents of the Atlanta, Richmond and St Louis Fed branches will also be giving speeches.
Elsewhere, earnings from Fox News, Wall Street Journal parent News Corp (NASDAQ:NWS), and Tapestry, owner of luxury retailers Coach and Stuart Weitzman, are due before the opening bell.
11:41am: Mortgage arrears jump, reports UK Finance
The number of mortgages in arrears has risen, partly driven by a jump in buy-to-let landlords falling behind on payments, according to a report released today.
Trade association UK Finance has reported that there were 87,930 homeowner mortgages in arrears of at least 2.5% of their outstanding balance, in the third quarter of this year.
NEW:
Sharp rise in mortgage arrears especially for landlords.. reported by UK Finance, but from low base, still low historically.
“interest rate pressures felt more acutely in BTL sector, where landlords may not be able to raise rents to cover the increases in their payments.” pic.twitter.com/Al4F2t7mzy
— Faisal Islam (@faisalislam) November 9, 2023
That was 7% higher when compared to the April-June quarter, and shows that some households aren’t able to meet their mortgage payments following the steady increase in UK interest rates since the end of 2021.
The number of homeowners in the ‘lighest arrears’ (ie, behind on between 2.5% and 5% of their balance) rose by 10% in the quarter.
UK Finance also reports that the number of buy-to-let mortgages in arrears has jumped by 29% in the last quarter, with 11,540 BTL mortgages in arrears of 2.5% or more in July-September.
11:17am: Auto Trader jumps as results beat forecast
Sitting top of the FTSE 100 risers is Auto Trader Group PLC (LSE:AUTO), up 7.1%, after what Bank of America called a "strong set of first half results."
The investment bank highlighted a solid performance in the core business, leading to reported operating profit 4-5% ahead of expectations and improved 2024 guidance.
As a result, it has raised financial year 2024 adjusted Ebitda forecasts 4% and lifted its price target to 790p from 770p.
Progress on the digital retail trial helps to build confidence in the mid-term growth outlook, while the market backdrop is demonstrating continued resilience, BofA said.
The bank said with valuation still near 5 year lows relative to the market, shares trade on an undemanding 19.6x 2024 price/free cash flow multiple against peers' on 20-25x.
10:57am: AstraZeneca makes play in boomimg weigh-loss market
AstraZeneca PLC (LSE:AZN) remains in demand amid today’s results and after striking a deal to enter the booming weight-loss drug market, which could rival products from Eli Lilly and Novo Nordisk (NYSE:NVO).
The Anglo-Swedish drugs maker has agreed to pay as much as $2 billion to gain an experimental pill for diabetes and obesity.
The treatment developed by Chinese biotech Eccogene is in early-stage clinical tests for diabetes and unlike existing blockbusters, the treatment doesn’t require an injection.
Eccogene will get $185 million upfront and could receive an additional $1.83 billion in future "clinical, regulatory, and commercial milestones and tiered royalties on product net sales".
AJ Bell analyst Russ Mould commented: "While this might be perceived as an attempt to jump on the coat tails of the likes of Novo Nordisk (NYSE:NVO) and Eli Lilly in what has become a booming market, AstraZeneca has form for adding strings to its bow – prior to the Covid pandemic it was not considered to have any particular expertise in vaccines, for example."
New York-listed Eli Lilly on Wednesday said the US Food & Drug Administration had approved its Zepbound injection for obesity treatment, sending shares 3.1% higher in New York.
It is expected to be available in the US within weeks, joining the likes of Novo’s successful Ozempic and Wegovy, and is widely expected to become a bestseller.
JPMorgan analysts have predicted annual sales for so-called GLP-1 drugs to reach $140 billion by 2032, with the market dominated so far by Novo and Lilly.
Derren Nathan, head of equity research, Hargreaves Lansdown noted Astra has an outstanding track record of delivering novel therapies and its not standing still.
“If successful, then the potential $1.8 billion consideration may well be worth it. But given it’s still in phase 1, there is a long path to follow,” he said.
Shares in AstraZeneca are 2.4% higher in London.
10:30am: Inflation will fall without need for rate rises
Inflation will fall without the need for further increases in the cost of borrowing, the central bank’s chief economist has said.
Huw Pill said the current level of interest rates would bring inflation back to the 2% target over the next three years, signalling that interest rates have peaked in the UK, my colleague Phillip Inman reports.
But he warned that wage increases were higher than the Bank would expect now that the economy was slowing towards stagnation. Services firms were also pushing prices higher despite a drop in demand, which meant interest rates would need to stay elevated for longer to achieve the inflation target.
In a presentation to the Institute of Chartered Accountants in England and Wales (ICAEW), Pill said: "Having established monetary policy in restrictive territory, it’s not the case that we need to raise rates in order to bear down on inflation."
10:07am: Unilever's new CEO "inspires confidence" says Barclays
Unilever is up 1.4% supported by positive comments from Barclays which has high hopes for new chief executive, Hein Schumacher.
The broker has upgraded the Marmite owner to overweight from neutral and raised its price target to 4,600p.
“There's much to do and it will take time but new CEO Hein Schumacher comes across as a real operator who understands the challenges.” It said.
“To us Hein Schumacher is a breath of fresh air with a coherent plan and a real mandate to execute it,” it added.
Barclays said the new CEO's vision “inspires confidence,” while the refreshing of the management team was “necessary and healthy.”
Things might not get better quickly but Barclays feels confident that there is urgency and clarity in the new CEO’s plans, even if the content of the plan was not new.
“There were a number of things that we heard from Hein Schumacher that have come straight out of the P&G playbook,” Barclays said, with Unilever is now talking about brand superiority across every vector, not just technical superiority.
9:29am: Lancashire rises on special dividend, buyback
In the FTSE 250, Lancashire Holdings is the top riser after it announced a capital return of up to $169 million - $119 million in special dividend and up to $50 million in buy-backs following strong operating performance year-to-date.
Peel Hunt said alongside the capital return, premiums increased 23% to $1.56 billion, supported by rate increases.
“The environment remains positive, and Lancashire sees further growth opportunities in 2024 funded by the capital generated this year,” the broker commented.
“Despite an active period for catastrophe losses, Lancashire has not seen any material losses across its own book, suggesting a strong underwriting performance,” it added.
9:14am: S4 Capital warns again, shares slide
S4 Capital PLC (LSE:SFOR) has tumbled 15% after the advertising group cut guidance for the third time in four months.
“Given slower than expected trading in the third quarter and current client activity levels, we expect that like-for-like net revenue for 2023 will be below the prior year, with an operational Ebitda margin now of around 10-11%,” the firm said in a statement.
In September, the firm predicted like-for-like net revenue to be down on the prior year and operational Ebitda margins in the range of 12% to 13.5%.
In July, it forecast revenue growth between 2% and 4% and an Ebitda margin of between 14.5% and 15.5%.
Sir Martin Sorrell, executive chairman said: “Trading in the third quarter was difficult, reflecting the global macroeconomic conditions with continued client caution to commit and extended sales cycles, particularly for larger projects and to some extent clients in the Technology sector.”
9:03am: William owner lifted by DraftKings bid reports
While industry peers Flutter Entertainment and Entain flag, shares in William Hill owner, 888 Holdings PLC (LSE:888) are up 2.7% after a report that DraftKings considered bidding for the firm earlier this year.
The Financial Times said the US betting group discussed a bid for 888 over the summer with some of the struggling UK betting operator’s top shareholders, citing two people briefed on the talks.
The early-stage discussions, which took place in June and July, were held between DraftKings’ chief executive Jason Robins and a group of 888 shareholders, FS Gaming, the people said, with advisers present on both sides.
FS Gaming, which includes industry veterans such as former GVC chief executive Kenny Alexander, was at the time a top-five 888 shareholder.
Robins met with FS Gaming’s Lee Feldman, a former GVC chair, to discuss the takeover plans, including the possibility of appointing Alexander as 888 chief executive, the people said.
8:46am: FTSE rallies, but Flutter loses big
The FTSE 100 has recovered its early losses to trade little changed, with gains in index heavyweight AstraZeneca providing support.
Flutter Entertainment, the owner of Betfair and FanDuel, is the big loser, down 10.7%, after forecasting Ebitda, excluding its US business, will be at the low-end of guidance at around £1.44 billion (proir range £1.44 billion-£1.6 billion) reflecting a £50 million hit from “very customer friendly sports results” and adverse movements in foreign exchange rates of £30 million.
Flutter expects US revenue and adjusted Ebitda in the middle of previous guidance at £3.75 billion and £140 million respectively.
Entain, the owner of Ladbrokes and Coral, have fallen on the back of the numbers, down 2.6%.
Leading the risers, is Auto Trader, up 5.8% after its results.
Shore Capital noted revenue, operating profit, and basic EPS were ahead by 12%, 10% and 2% respectively and above Bloomberg consensus expectations.
In the FTSE 250, Wizz Air is flying low, after management narrowed its full-year income guidance to the €350 million to €400 million range, down from €350 million to €450 million, due to “the ongoing macro environment uncertainty and continuing difficult operating conditions, from an infrastructure and security perspective”.
Elsewhere, Unilever is up 0.7% as Barclays upgraded to overweight with a 4,600p price target.
8:15am: FTSE 100 slips after mixed bag of trading news
The FTSE 100 has opened lower as falls in energy stocks and a mixed bag of trading updates weighed.
At 8:15am, London's lead index was down 34.34 points, 0.5%, at 7,367.38 while the FTSE 250 was little changed at 17,846.27.
Astra Zeneca, which has the second-largest weighting in the index, only behind Shell, rose 2.0% after raising guidance for sales and earnings, and announcing a deal in the high profile area of obesity treatments.
The drugs maker reported good growth in sales for its oncology medications, including Tagrisso and Imfinzi, plus a strong performance for kidney disease drug Farxiga.
There was also bright news in the housing market after a survey from Rics showed the pace of house price falls may be steadying as the end of the year approaches.
This was followed by a positive trading update from Taylor Wimpey, up 2.9%, which predicted top-end operating profits although it said the market remains challenging.
Full-year operating profits is seen at the top end of the £440-470m range compared to consensus of £452 million.
John Choong, senior equity research analyst at Investing Reviews, said: “Following these relatively robust results, paired with declining mortgage rates, most specifically the Nationwide going sub-5% on a 2-year fixed rate, it is starting to feel like the housing market may have found a bottom.”
"Combined with the fact that both Halifax and Nationwide showed that house prices ticked up in October, it seems like the developer is well-positioned to head into 2024 with a better cost structure.”
Heading south were shares in B&M Value Retail, down 5.2%, and betting operator Flutter Entertainment, down 8.2%, after their respective trading updates.
While the recent falls in the oil price kept index heavyweights BP, down 1.7%, and Shell, down 0.7%, under pressure.
7:57am: B&M plans more new stores, ups guidance
Lastly, before the market opens, B&M European Value Retail SA (LSE:BME) has lidted financial year 2024 group adjusted Ebitda guidance, to be in the range of £620 million to £630 million, materially higher than the £573 million reported a year before.
The retailer said in the six months ending September, group revenue increased by 10.4% on prior year to £2,549 million with all fascias trading well with positive transaction numbers and new space growth.
It also expects store openings to reach not less than 1,200 in the UK, versus previous guidance of 950.
7:52am: AstraZeneca ups guidance, inks obesity drug deal
AstraZeneca PLC (LSE:AZN) has raised guidance in its third quarer results and announced a deal to develop a drug targeting patients with diabetes and obesity.
The drugsmaker now expects total revenue to increase by a mid single-digit percentage, previously low-to-mid single-digit, with core EPS expected to increase by a low double-digit to low-teens percentage, previously high single-digit to low double-digit.
The firm said total revenue in the nine months to September rose 5% to $33.79 bilion, despite a decline of $2.90 billion from Covid-19 medicines.
Total revenue from oncology medicines increased 20%, CVRM by 19%, R&I 9%, and Rare Disease 12%.
AstraZeneca said it had entered an exclusive licence agreement with Eccogene for ECC5004, an investigational oral once-daily glucagon-like peptide 1 receptor agonist (GLP-1RA) for the treatment of obesity, type-2 diabetes and other cardiometabolic conditions.
The treatment is not injected but taken orally and will rival products from Eli Lilly and Nove Nordisk.
7:46am: Decline in house prices steadying, says Rics
The pace of house price falls may be steadying as the end of the year approaches, according to surveyors.
A net balance of 63% of property professionals reported house prices falling rather than increasing in October, edging down from a balance of 67% in September, the Royal Institution of Chartered Surveyors said.
Its report said the latest house price reading "suggests the pace of decline, from a national perspective, has levelled off in recent weeks. Nonetheless, the house price metric remains deeply negative across most parts of the UK, even if the latest readings have moved off the lows hit over the past couple of months in the majority of cases".
UK RICS House Price Balance Oct: -63% (est -65%; prev -69%)
— LiveSquawk (@LiveSquawk) November 9, 2023
Rics said "bucking the aggregate picture", survey participants continue to cite a steady increase in prices across Northern Ireland.
Sales activity remained weak, with a net balance of 25% of property professionals reporting a decline in sales rather than a rise in October.
7:39am: National Grid backs guidance but profit slips
National Grid PLC (LSE:NG.) said it had delivered cost savings ahead of schedule, and confirmed full-year guidance, although it reported a sharp drop in profitability.
Statutory pre-tax profit in the six months to September 30 fell 18% to £1.37 billion from £1.67 billion, while EPS declined 14% to 28.8p from 33.4p.
The firm said while this performance was in line with expectations, non-recurring items reported in 2022/23 explain why profit was down versus the prior period.
For the full-year, National Grid continues to expect underlying EPS to be modestly below 2022/23 levels following the UK government change to the capital allowances legislation from 1 April 2023.
It expects this change to have a 6-7p per share impact on EPS, albeit no economic impact over the long term.
The FTSE 100-listed firm said it had achieved a further £53 million of efficiency savings during the half year taking cumulative savings to £426 million, exceeding the £400 million target ahead of schedule.
Looking ahead, the company updated its five-year financial framework for the period 2020/21 to 2025/26.
It forecast total cumulative capital investment of around £42 billion, asset growth at a compound annual growth rate of 8-10% driving underlying EPS CAGR of 6-8% from the 2020/21 EPS baseline of 54.2p.
The dividend was increased 9% to 19.40p from 17.84p.
7:20am: Taylor Wimpey predicts top-end operating profit
First up, and some better news for the housebuilding sector.
Taylor Wimpey PLC (LSE:TW.) expects to report top-end operating profits despite a challenging market as consumers grapple with high mortgage rates.
The housebuilder reiterated full year UK volumes guidance in the range of 10,000 to 10,500 homes, but said due to a focus on optimising price and cost discipline, it now predicts operating profit to be at the top end of the guidance range of £440 million to £470 million.
Chief Executive Jennie Daly said it was a “resilient performance in what continues to be a challenging market backdrop, reporting a robust sales rate and strong financial position.”
The FTSE 100-listed firm said the market continues to be impacted by weak consumer confidence influenced by high mortgage rates and cost of living pressures which are negatively affecting affordability for our customers.
In the second half to date, net private sales rate per outlet per week was 0.51, unchanged from a year ago, with a cancellation rate of 21% (2022: 24%).
For the year to date, it achieved a net private sales rate of 0.63, down from 0.74 a year ago, with a cancellation rate of 18% (2022: 18%).
Taylor Wimpey said its current total order book excluding joint ventures stood at c.£1.9 billion at November 5, representing 7,042 homes.
It said the balance sheet remains strong and the firm continues to expect to end the year with net cash between £500 million to £650 million.
7:00am: FTSE expected to open lower
The FTSE 100 is expected to open lower ahead of a hefty batch of corporate earnings, and mixed performances from global markets.
Spread betting companies are calling London’s lead index down 17 points after closing down 8.32 points at 7,401.72 on Wednesday.
In Asia, markets were mixed after figures showed China slipped back into deflation in October, a blow as policymakers look to revive the world’s second largest economy.
In the US, the Dow edged lower, but the S&P 500 and Nasdaq extended their winning streaks to 8 and 9 respectively, their best runs since 2021, although gains were modest.
Philadelphia Fed President Patrick Harker told a conference in Evanston, Illinois, that he felt holding interest rates at their current, restrictive, level was the right course of action.
Harker’s comments followed a speech by Federal Reserve Chair Jerome Powell which gave little away on his thoughts on the economy and interest rates.
Harker said the US Federal Reserve is likely done raising interest rates to tackle inflation but probably won't cut them "in the short term."
Back in London, and the early focus will be results from FTSE heavyweight AstraZeneca, Taylor Wimpey, B&M, Auto Trader.